Pricing Strategies

There are five steps to determine pricing objectives, analyze market reaction, estimate costs, analyze competition, and choose pricing method.
Objectives include becoming a quality leader, defending exclusivity, maximizing profit, maximizing market share, and surviving.
Methods of pricing include cost + margin, expected return on investment, and perceived value.
Pricing can also be influenced by market demand, competition, and perceived value.
Variations in pricing include discounts, rebates, functional discounts, and seasonal discounts.
Pricing strategies can be based on the Gabor limit theory, which considers the buyer's perception of quality and willingness to pay.
There are nine strategies for managing the quality-price relationship.
Pricing can also involve promotions such as trial packs, rebates, and free credit.
There are risks associated with certain pricing strategies, such as dumping and inflated prices.
Pricing decisions should consider the value to the customer, costs, and competition.

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